Throughout the call, reference may be made to slides of a presentation, which has been made available for reference through our website at www.fortressge.com under the Financials tab, or you can request a copy at info@fortressge.com.

During the call, management may make certain forward-looking statements that reflect the current views and/or expectations of Fortress with respect to its performance, business and future events. The forward-looking cautionary note contained in the MD&A is applicable for today's call.

During the call, management will also make reference to operating EBITDA loss. For a definition of operating EBITDA and a reconciliation to net income or loss to operating EBITDA loss, please see the management's discussion and analysis available on SEDAR at www.sedar.com.

I'll now pass the call on to Giovanni for an overview of the second quarter and Dissolving Pulp operations.

Thanks, Kurt, and good morning, everyone. For today's call, I will provide an overview of the second quarter and an update on the Dissolving Pulp segment, followed by Ken Smith, who will provide an update on Fortress advanced Bioproducts. Kurt Loewen will then provide some more detail on the financial results of the second quarter of 2019. We will then open the call up for questions.

Please turn to Slide 3 of the presentation. Fortress Global reported 2019 second quarter operating loss of $9.5 million. The Dissolving Pulp segment incurred operating EBITDA loss of $8.5 million. The company invested $2.2 million in the Bioproducts segment, which was offset by $2.1 million in grants and funding, and corporate costs were $900,000 in the second quarter of 2019.

Next, moving to slides 4 and 5. Due to a combination of factors, such as lower realized sales price resulting from decreased dissolving pulp pricing, a resulting inventory write-down and production challenges coupled with an extended annual maintenance shutdown, operating results in the second quarter of 2019 were far below management expectations. Current dissolving pulp prices remain well below pricing trends experienced over the past 10 years. However, management believes dissolving pulp prices should trend toward more normalized pricing in the short term.

With support from our partners, the company believes they can endure the current market uncertainty in part caused by trade disputes between China and the United States, which is impacting global trade. China represents approximately 65% of the dissolving pulp market.

Moving to Slide 6. According to the China Chemical Fiber Group, viscose staple fiber capacity grew by approximately 740,000 tonnes in 2018, driving dissolving pulp demand, which is forecasted to continue in 2019. The substantial increase in VSF capacity in 2018 contributed to softening of VSF pricing throughout 2018 and the first half of 2019 as mills struggles with inventory buildup as the new supply came online.

The sharp decline in dissolving pulp pricing subsequent to the first quarter of 2019 is in contrast of a positive trend pricing experienced over the previous 4 years. Current dissolving pulp prices are at their lowest level since the end of the 2009 recession. Management believes this is to be a result of temporary disruption and marketing condition as there has been no material change to the underlying supply and demand fundamentals.

Thanks, Giovanni. In the second quarter, we continued detailed review of the demonstration plant design and project implementation plan, which resulted in an expanded scope of the demonstration plant to produce xylitol, animal feed, lignin and other potential bioproducts. The project will utilize available hemicellulose and enable the mill, the FSC, to increase dissolving pulp production due to reduced loads of hemicellulose and other organics on the evaporators and recovery boiler.

As outlined on Slide 7, the company continued to advance the planned xylitol complementary bioproducts demonstration plant. However, we will minimize investments in the Bioproducts segment, while preserving funding commitments during the current uncertainty related to the dissolving pulp market. $7 million of investment and loan funding previously committed to by the Government of Québec, subject to the execution of definitive agreements with Investissement Québec are not yet concluded.

Thanks, Kent. Our cash balance at the end of the second quarter was $8.8 million, of which $3.7 million was restricted. Included in the restricted cash balance was a $3.6 million deposit related to our $34 million secured loan with IM infrastructure private debt fund loan.

Subsequent to quarter end, $3.4 million of that restricted cash was released and was used to secure additional wood fiber inventory for the FSC mill.

During the second quarter, we received CAD 4.3 million or CHF 3.2 million that was held in escrow as part of our holdback on the sale of the Security Paper Product segment in late 2017. We spent $3.3 million on capital expenditures and received $3.9 million in government grants during the second quarter. Financing costs also consumed $4.4 million, and repayment of debt consumed $2.1 million. Working capital provided the cash of $8.8 million, offset by operating EBITDA results.

Slide 8 presents an overview of SG&A expenses, which were $5.2 million in the second quarter of 2019 compared to $4.9 million in the first quarter of 2019, both of which include development costs related to the Bioproducts segment, which were largely offset by grants and funding.

SG&A in this quarter is comparable to prior quarter and in line with expectations.

On Slide 9, we have a schedule of our upcoming annual principal repayments. On June 17, 2019, the company announced that it has been granted a multiyear moratorium on upcoming principal and interest payments by Investissement Québec. Fortress has receive, without penalty, a postponement of approximately $45 million in principal and interest payments under the IQ loan from June 30, 2019, to December 31, 2021.

Interest payments during this period will be deferred and capitalized, and the maturity date of the IQ loan has been extended by 5 years to December 31, 2031. The principal amount of the IQ loan, including capitalized interest, will be repaid in quarterly installments beginning on March 31, 2022.

IQ has also agreed to extend the moratorium and the term for an additional 24 months and subordinated security in favor of third-party lenders in the event that Fortress obtains new financing subject to certain limitations.

During the second quarter, the company incurred losses of $61.2 million, including an impairment charge of $44.9 million and an inventory write-down of $3.6 million. The company had positive cash flows from operation activities -- from operating activities of $0.5 million and working capital deficit of $10.2 million.

The company's ability to continue as a going concern is dependent upon the company being successful in accessing additional sources of liquidity from lenders or investors until it is able to generate sufficient sustainable cash flow from operations to meet its ongoing operating, financing and investing requirements.

Active discussions with the company's lenders are ongoing as well as efforts to seek other sources of financing. We are currently evaluating all reasonable options. At this time, we're not able to provide additional disclosure on this.

During the quarter, the company's market capitalization was lower than the carrying amount of its net assets. Management of the company determined that this, in addition to deteriorating market conditions, constituted an impairment indicator and completed an impairment assessment of the Thurso mill. Management used a consistent valuation model compared to the one used at December, adjusted for key assumptions. Management's impairment evaluation resulted in the identification of an impairment loss of, as mentioned, $44.9 million at the Thurso mill as at June 30, 2019.

I'd now like the operator to open the call for questions on our financial results.

(Operator Instructions) At the moment, we don't have any questions that are queued up, so we'll choose to wait a little moment. (Operator Instructions) And just to confirm, we still don't have any questions in the queue.

Okay. So we do have a question that queued up. (Operator Instructions) And this question comes from the Dave Gibbon of -- well, a private investor.

Can you give us any insight into current operations? There was one line in the MD&A that spoke to the fifth digester being optimized at the end of July. Can you give a sense of, I mean, go forward maybe it's in the near term production costs and these efficiencies?

Dave, this is Giovanni. Indeed the fifth digester and operations have been optimized. The team has done a great job in being able to achieve the expected production using the fifth digester and that is working very well currently and look to continue to do so for the rest of the year and next year.

Giovanni, I was very happy to see you bought shares about a few weeks ago. And I guess if you bought shares, this is because you have a positive outlook for the company. Could you just give me a few words about that? Because I hold 6,000 shares -- 60,000 shares, and I'm a little chicken right now. So I will leave it to you.

Your feelings are understandable based on a difficult Q2. The outlook is, as I mentioned, and from the question from Dave, the fifth digester now provides us the ability to be able to run the mill and leverage the assets to its maximum potential. The team has done a great job in optimizing the asset. The price right now of dissolving pulp, as we mentioned, is at a -- is trending towards a 10-year low, but we expect, as other analysts within the market, that the price increases back to a normalized trend. And with production hitting numbers with the fifth digester that are superior to what we've seen in the past when prices getting back to a normalized level, we're all very excited and looking at a brighter future.

Yes. This is Kurt here. Certainly, we need to have a combination of solutions because we do have convertible debt, which has $3 million twice a year is that we need to pay as well as the IAM debt that I referenced already as well. So obviously, the market has -- is not in a good situation right now, but a combination of solutions with partners, possible outcomes from active discussions with multiple lenders, combined with better mill operations and improving DP pricing will certainly help us in that regard.